Govts at odds over water buy-back proposal

Reporter: Paul Lockyer

KERRY O’BRIEN: In the midst of a devastating drought and with some inland rivers reduced to a virtual trickle, the huge water entitlements handed out to irrigators in the past are facing more scrutiny than ever. Cubbie Station, the cotton farm in south west Queensland licensed to hold the volume of Sydney Harbour in its storage dams, has copped most of the heat. Four years ago, the Queensland Government considered buying Cubbie and returning its water to the environment but couldn't get the Federal Government on board. Now a similar opportunity has come knocking with two neighbouring cotton farms on the market. Between them, they're entitled to take more than 200,000 megalitres a year, almost half of Cubbie's huge entitlement. But once again, the Federal Government seems less than keen to take advantage of what others are describing as a rare opportunity. Paul Lockyer reports.

PAUL LOCKYER: It's more than 2.5 years since the Narran river delivered a flow across Queensland, across the border and down to the internationally prized wetlands of the Narran lakes of NSW. Back then the bird life descended on the area, but not enough water arrived to allow them to breed.

PROF RICHARD KINGSFORD: The ibis had turned up and they were gearing to start breeding but the flood didn't eventuate to the extent we expected and as a result of that, you know, the bird breeding just didn't happen.

PAUL LOCKYER: Environmentalists and graziers blamed the irrigators upstream in Queensland for taking too much water, particularly the Clyde cotton station which straddles the river.

RORY TREWEEKE: The way the river runs you cannot take out of a flow like that the sort of amounts the irrigators extract, add it all together and given that Clyde is a fairly large extractor on the Narran, it would have to have an impact.

PAUL LOCKYER: Clyde took a total of 38 megalitres of water in the 2004 flow, enough water to fill 38,000 Olympic swimming pools. But that water is long gone and as the drought extended its reach, Clyde and another nearby cotton property were put up for sale earlier this year. Both properties border Cubbie Station, Australia's biggest and most controversial irrigator. Between them, Clyde and Ballindool have licences to take 200,000 megalitres a year, half as much as Cubbie's entitlement.

RICHARD KINGSFORD: People don't realise that Cubbie has got Sydney Harbour worth but there's another two Sydney Harbours worth of off-river storages in that catchment.

IRRIGATOR: Put the water on to ensure the moisture.

PAUL LOCKYER: Four years ago Queensland Premier Peter Beattie failed in his attempt to win Federal Government support to acquire Cubbie and return its water to the environment. Now with two other big irrigation properties on the Margaret, graziers downstream are urging government action.

RORY TREWEEKE: Clearly the states have made mistakes in the past in over-allocating these licences. They don't or claim not to have the resources to buy back these licences at the moment. They have to look to the Federal Government for the money to do it.

PAUL LOCKYER: The noises for a government purchase began with Queensland Nationals Senator Barnaby Joyce, who lives in nearby St George. There was initially a positive reaction from the Queensland Government, but the matter seemed to go no further, despite overtures that were also made to Canberra.

MALCOLM TURNBULL: Well, the Queensland Government approached us about them and we, the first question we asked was, these properties have very large notional entitlements, but how much water actually or practically are they ever likely to be able to divert?

PAUL LOCKYER: As that investigation unfolded, Senator Joyce who opposed the acquisition of Cubbie station, continued to press for a government purchase of Clyde and Ballindool.

BARNABY JOYCE: It was the best of many evils, because at least we had willing sellers and willing buyers. What we don't want in our area is people to so called go looking for a witch and decide Cubbie Station is the witch and put all their energies in burning that witch at the stake in front of our nation and think they're achieving something.

PAUL LOCKYER: Malcolm Turnbull, who is managing Federal Government water policy, saw the local push for a government purchase of the two properties as an attempt to take the heat off Cubbie's water use.

MALCOLM TURNBULL: That is why the purchase of Clyde and Ballindool was being most strongly advocated by the proprietors of Cubbie Station. They saw if those properties were bought, if the taxpayers' money was used to buy those properties, it would take some pressure off them having to give up some of their entitlements in a water management plan.

PAUL LOCKYER: Cubbie was accused of taking the lion's share of the Culgoa river in the 2004 flood, denying the water to those downstream, including it's southern neighbour, Ballindool Station. Water users on the Culgoa have told Malcolm Turnbull there's little point acquiring Ballindool for the little water it has to offer, but they see Clyde as a different proposition.

RORY TREWEEKE: I don't have in a model in front of me that tells me exactly how much that would improve things. But clearly, if you return 100,000 odd megalitres on the Narran alone, that would have a very positive impact.

PAUL LOCKYER: The floodwaters Clyde took two years ago produced 5,500 acres of cotton. There will be no crop this year. Clyde and Ballindool have already been to auction and were passed in on bids of more than $20 million each. The State Government stayed away. Those marketing the two cotton properties claim that speculation about a possible government purchase subdued buyer interest, but the drought made its mark too.

HAMISH MCINTYRE, MANAGER, CLYDE STATION: With no water in storages and, you know, paying interest, etc, you know I'd like to see some water there too before we take the risk. That's common sense.

BARNABY JOYCE: No one's got water at the moment because we're in the middle of a drought. Maybe that's the good time to buy. Buy when the market's down and save yourself money.

PAUL LOCKYER: But the question for the Federal Government is just how much water Clyde and Ballindool could really expect to get. The Federal Government doubts the big entitlements the properties have on paper will be realised when the rivers run again.

MALCOLM TURNBULL: I can't speak to the 2004 flood statistics particularly, but our conclusion was, and this was the view that was shared generally among governments, and it's my recollection, was that the amount of water that you would actually end up acquiring simply was not worth the price that was being put on those properties.

PAUL LOCKYER: And as the water arguments rage, some downstream graziers on the Narran river are urging the Government to think again.

RORY TREWEEKE: Fundamentally it's the only way the Federal Government can come in and be a positive assistance, provide the money to take those licences back and return them for the flood plain and the environment.